Company News

BUZZ-CAE's Bombardier unit deal to boost profit - NBC

** Aviation training provider CAE Inc to buy business aircraft training arm of Bombardier for $645 mln to expand its position in business aviation training

** CAE is financing the deal with a combination of cash on hand, drawing on its existing bank facility and new committed term loans

** Brokerage National Bank of Canada (NBC) raises CAE’s TP by C$1 to C$30; says deal to add to earnings in high single-digit percentages and to free cash flow in first full year of acquisition

** Says addition of the business to increase CAE’s overall civil segment operating margin, extending position as Authorized Training Provider to Bombardier

** Raymond James says the transaction is valued at ~9.0x forward EBITDA after accounting for expected growth and $6 mln of cost synergies

** Says “we are uncertain that this acquisition will change the lagging trend in EBIT, EPS and ROA growth behind the company’s expanding physical presence”

** CAE is up ~4 pct YTD while BBDb is down ~20 pct YTD